Hello World! Welcome Friends! If there is one thing that you can guarantee people are talking about, it’s inflation. Nowadays, almost everything has gone up in price. This is especially true regarding the housing market. Even pre-pandemic, houses in nearly every part of the country were becoming more expensive. The high costs of homes in the country make real estate decisions difficult, even if you’re in a solid spot financially. One decision that many people have been moving towards is downsizing their homes. In turn, we’ve put together some pros and cons of doing so during this period of rising inflation,
The Pros
You Can Possibly Sell for More
As we’ve mentioned, homes have been becoming increasingly expensive. If you bought your home several years ago, it likely increased value quite a bit. Whether you still owe on your mortgage or not, you will probably be able to list your home on the market and sell it for a price much higher than what you bought it for. With the extra equity, you can put a larger down payment on the home you plan to downsize and potentially pay your mortgage off faster.
The Housing Market is Still Hot
As of right now, homes in many areas of the country are still selling very fast. It’s difficult to predict where the economy is headed, but there is no guarantee that the housing market will remain the same for too long. While it’s still in the seller’s favor, you can sell your house fast and for a good amount of money. Solid offers will be easy to come by, even if you sell your home to a cash buyer.
The Cons
The Downsized Home Will Likely Cost More than Normal
While yes, you can most likely sell your current home for more than what you originally bought it for, you might struggle to find a “smaller” home that costs a decent amount less. Unfortunately, a lot of other people want to downsize too. This can affect the selection of homes on the market that fit the criteria. However, if the price isn’t a deciding factor in the move to downsize, then you won’t have much to worry about
If You Need to Take Out Another Mortgage, Rates are High
If you need to take out a mortgage loan to cover the expense of the downsized home––this sometimes happens for people who choose to relocate to a more popular area––mortgage rates are currently high. This can make a move more expensive overall. You can mitigate the costs with a good credit score and a high down payment. Down the road, there is also the option of refinancing.
When choosing to downsize, a few factors can affect whether this is a good decision for you or not. Weigh the pros and the cons and choose based on where you are financially and your goals for downsizing!
Click the links below for any posts you have missed:
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8 Tips for Styling a Modern Home
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Toodles,
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